Reflections following the Backbench Debate on Money Creation and Society, Thurs 20th

Forgive the bittiness – I originally wrote this in parts in a Facebook conversation, but I think it’s worth collecting in one place for posterity.

PM’s unique success so far, where myriad monetary reform campaigns have tried and floundered before, is probably due to their avoidance of association with any kind of conspiracy theory, especially conspiracy theories associated with historical prejudice and persecution of Jews in Europe.

In fact the monetary reform policy only made it into Green Party policy this year because the previous year it was shouted down because someone got the false impression it was associated with antisemitic conspiracy theories and would bring the GP into disrepute, so in the absence of reliable independent information, Conference voted it down to err on the side of caution. Eventually the motion proposers managed to clear up that mis-impression, and the motion got passed the following year. But it is a real and serious risk to the campaign if people start mis-associating it with that sort of thing.

PM says our current crazy money system has accumulated through collective stupidity over generations. There is no grand evil conspiracy, or even a sincerely misguided but conscious design. It’s just accumulated through collective ignorance of the systemic effects of many particular decisions. This was PM’s starting assumption, but has since been confirmed by reading hundreds of papers and books about monetary theory and policy and statistics, which were confused and inconsistent, and by meeting politicians and bankers who mostly, or until v recently, hadn’t got a clue.

Humans are not that great at making long-term or systemic causal inferences. People can be closely involved in running a system all their lives and not notice the systemic effects of many small decisions including theirs aggregating up into something they didn’t predict or intend.

Another problem with the conspiracy theory mode of thinking is that it doesn’t motivate people to actually do what is needed, it’s a dangerously irrelevant distraction and it’s dis-empowering. Whether a conspiracy theory is true or not, usually makes no real material difference to what needs doing about the public issue. It’s a kind of superstitious thinking.

It implicitly assumes that someone else is in charge and the process of changing the status quo is about fighting the Establishment, which might sometimes be the case but if that’s a general assumption then it tends to miss the moments of clarity and reasonableness and opportunities to positively influence policy-makers rather than just sometimes succeed in forcing them to back down on their worst ideas. It also assumes a sense of politics being essentially a kind of force, rather than essentially about persuading free people and gathering consent and trust.

I don’t have any fixed preference for gradual reformation or sudden revolution, just whatever is appropriate to the situation.

In this situation, I think there’s too little clarity in the majority of policy-makers and in the general population for either approach to work without getting more clarity in a wider population first.

Even among ourselves we disagree about the details of how to implement a Sovereign (or Public) Money system. Monetative, PM’s sister organisation in Germany, have a slightly different/ additional and complimentary proposal for how to make the MPC or their equivalent more rigorously independent and accountable.

Even if sudden revolution were feasible, we don’t have all the answers or solutions, and we’re more likely to get to the best strategy and the best outcomes if we listen respectfully at least to our more reasonable and well-informed critics.

Even if we got a Sovereign Money system, there would still be problems remaining to be solved in monetary policy- e.g. some types of economic activity (e.g. social care for elderly people) might be intermediated better by a time-banking complimentary currency.

I thought the backbench debate was an extraordinarily *reasonable* discussion in Parliament. I know PMQs are the most pantomime-ish time in Parliament, but there does tend to be more party-political pantomime and ideological b.s. on display than there was in today’s debate. Unsurprising turnout, but pleasantly surprising quality of debate.

For example, Steve Baker is one of the best kind of critics- he agrees on the problem, its diagnosis and its importance, but has radically different ideas about solution(s), which probably means there’s at least an element of truth in his criticisms and well worth trying to integrate his points (by also supporting currency diversification and free competition in currencies, after establishing a Sovereign Money system).

I disagree with Steve Baker about the prioritisation of currency diversification and free competition in currencies instead of Sovereign Money, or as a more likely strategy to lead to better outcomes, because without removing the implicit State subsidy and absolute public underwriting for the risks of private money creation of the main ‘national’ fiat currency by banks, other currencies won’t be competing in a genuinely free market. So free competition in an open market for currencies can’t solve the problem on its own. He’s got the order the wrong way around, I think. After implementing a Sovereign (I prefer the word Public) Money System, then alternative or complimentary currencies would have fairer chances at competing with national fiat currency and a better chance at creating the public benefits of genuine free competition.

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I am a GP member myself, and the monetary reform policy is a major reason why, but I’m not convinced a majority of GP members really understand the party’s monetary reform policy or the monetary, banking and fiscal situation, beyond just enthusiasm for its buzzwords. (Sad but true.)

Unfortunately I think too many people in Green and LibDem parties have internalised the apparent political necessities created by the FPTP electoral system and don’t see that regarding your nearest potential allies as your arch-rivals and bitterest competitors is just an artefact of the FPTP electoral system, which is maintained by the big parties for their own party-political advantage and not for the public interest.

So even tho I like the political processes that tend to happen more in coalitions, I don’t think any coalition between the Greens and LibDems is likely to happen until either FPTP goes or my generation (I’m 31) who remember this LibDem coalition government dies off.

I don’t know enough about the other parties to have any particular opinion on them, other than that in general I like coalition politics more than adversarial party politics.

I don’t think they need to have a joint manifesto, either. I think squashing an excessively wide diversity of views into artificially large parties is another consequence of FPTP. Look at any of the traditional big three parties and they’re so internally diverse it’s quite misleading to outsiders or people who haven’t invested a lot of time in understanding it.

I’d prefer the Cooperative Party to go its own way from the other factions in the Labour Party. I’d prefer the Social Liberals to go their own way from the LibDems. I’d prefer the Social Paternalists and economically conservative Social Liberals from the Conservative Party to distinguish themselves. And that would be feasible and not an electoral disadvantage in forming broad coalitions across many small parties if we had a proportional and preferential voting system that didn’t unfairly advantage bigger parties, as though politics can only be or should be all about gathering a bigger faction, stoking up the hostile emotions and fighting more intensely. That’s the attitude behind designing an electoral system that prejudicially advantages bigger parties, and it’s a little bit implicitly fascist (i.e. the sense that might is right, or that power implies moral authority, or that politics is about manipulation and coercion, rather than about convincing people respectfully and reasonably to freely give their trust and consent.

I am also sick of supposedly liberal left-wing campaigning organisations using those kind of ‘pressurising’ and ‘fighting’ campaigning tactics. It’s become normal, but it’s still wrong. And it’s internalised from an artificial system (FPTP) that makes it appear as though gathering a faction, stoking up a zealous fervour in your own ranks and then fighting the Other is necessary and inevitable, and I find it so frustrating that they don’t see that that perceived necessity is just an artefact. I particularly hate the way campaigning organisations, I think, intentionally mis-represent the level of conflict often making it seem as though it’s a conflict on the level of values when really it’s a conflict on the level of assessment of the facts, misunderstanding of the meaning of the facts taken together, disagreement about strategies to the same aims, disagreement about appropriate and ethical communications and campaigning tactics, etc. Most of the time, across the political spectrum, most people are operating on mostly the same values, but their disagreements are often mis-represented as if they were about values in order to increase hostility in order to pressurise the other side. That’s manipulative and coercive and founded on a mis-understanding.